Successfully completing your Chapter 13 case may feel like it lasts a long time, but it can have many advantages. Many of those advantages come only if finish it.
Successfully completing a Chapter 13 case begins with a Plan getting approved at the “confirmation hearing.” Now you have to comply with that plan to get the advantages that Chapter 13 gives you over Chapter 7. And you also need to finish the case to get some of the most important and long-term benefits. So, what else has to happen after plan confirmation to make sure that you complete your Chapter 13 “adjustment of debts” case?
Do Your “Debtor Education”
Besides completing a “credit counseling” class before filing bankruptcy, after filing you must also complete a “debtor education” class. These are both usually done online, although they can also be done on the phone.
Debtor education requires completing “an instructional course concerning personal financial management.” Section 111(b) of the U.S. Bankruptcy Code. If you don’t complete this, your Chapter 13 case will end without a discharge (legal write-off) of your debts. Section 1328(g)(1) of the Bankruptcy Code.
It’s too easy to forget about this requirement because there’s so much else going on. Debtor education can be done anytime during the case, but it’s smart to do it during the first month or two. The law is clear: “The court shall not grant a discharge… to a debtor” without having completed the “debtor education” class. Section 1328(g)(1). This means that you wouldn’t get a court order at the end of your case writing off your remaining debts. That’s likely one of the most important benefits of your Chapter 13 cases. After 3 to 5 years of carefully complying with all the rest of the Chapter 13 requirements, you obviously don’t want to mess up on this relatively simple one.
Avoid or Defeat “Nondischargeability” Complaints
Each of your creditors has until 60 days after your Meeting of Creditors to file a formal complaint objecting to the “dischargeability” of its particular debt. Creditors can only raise these objections on very narrow grounds. These grounds usually must relate to alleged fraud or misrepresentation by you in getting the debt. Or they can relate to your “willful and malicious injury” to someone or his or her property. If the creditor does not raise such an objection within this 60-day period, it can never do so after that. (This assumes that you listed the creditor in your schedule of creditors and it got notice of the deadline).
Creditors rather seldom file these complaints, because they seldom have the grounds to do so. However, if it does happen in your case it can cause a major headache. If a debt you expected to discharge can’t be, having to pay that debt can jeopardize your whole case. That’s because you likely wouldn’t have enough money to pay other debts that you’d want or need to pay.
Just because you get such a complaint doesn’t mean you can’t defeat it. If you have any concerns about any possible fraudulent or malicious behavior that a creditor could raise, talk with your bankruptcy Kalispell lawyer about it as soon as possible.
Again, these objections to discharge don’t happen in most cases. Keep an eye on the 60-day deadline mentioned above. And be pleased when it passes without any creditor objections.
Pay Your Chapter 13 Plan Payments
It’s not likely you’d forget about your monthly plan payment since it’s at the core of your case. There is a court order approving the terms of your plan including the all-important payment amount. So we can’t emphasize it enough.
Be proactive. Be completely clear about the payment amount, and how and when to pay it. Keep a complete record of your payments. Track any scheduled increases or decreases in the payment amount. Do everything possible to make the payments. Otherwise you risk that your Chapter 13 case would be “dismissed” or thrown out.
If you can’t make the payment for any reason, inform your lawyer as far ahead of that happening as possible. Adjustments can often be made, but they take time to work out with your lawyer and legally implement.
(Our next blog post will be about what else you need to do to finish your Chapter 13 case.)